FIREMEN’S INSURANCE COMPANY, PLAINTIFF-APPELLEE, VS. MANILA PORT SERVICE, MANILA RAILROAD COMPANY, KLAVENESS LINE AND/OR SMITH, BELL & CO. (PHIL.), INC., DEFENDANTS. MANILA PORT…

Appeal by the Manila Port Service and the Manila Railroad Company
– hereinafter referred to collectively as appellants – from a decision of the
Court of First Instance of Manila.

The facts are set forth in said decision, from which we quote:

“On February 24, 1962, James S. Baker and Company, as shipper
shipped on board the M/S ‘Bougainville’, owned and operated by defendant Klaveness Line and represented in the Philip­pines by its
agent, defendant Smith, Bell & Co. (Phil.), Inc., for carriage to Manila a
ship­ment consisting of 50 pails grouting materials and 100 pails concrete
surface hardening com­pounded consigned to E. J. Nell Co. of Manila.  The bill of lading exhibit
A cover the shipment.

“The M.S. Bougainville arrived in Manila
and discharged the shipment on March
16, 1962 complete and in good order into the custody of defendant
Manila Port Service which is the arrastre operator in
the port of Manila.  The receipt of the cargo in good order is
evidenced by cargo receipts exhibits 5-Vessel to 14-Vessel, inclusive, which
are signed by the checkers of both the MPS and the vessel.  Subsequently thereafter, when the consignee
E. J. Nell Co., Inc. took delivery of the ship­ment from defendant MPS thru its
broker, the First Forwarder Co., Inc., defendant MPS de­livered 13 pails
grouting material forming part of the shipment dented with loosened covers and
contents damaged.  The MPS issued bad
order examination certificate exhibit D. 
The said bad order examination certificate contained the notation ‘B. O.
Pier’ showing that the damage to the cargo took place in the pier.  Since the shipment was insured with the
plaintiff, the latter upon presentation of the claim for enforcement of the
insurance by the consignee, E. J. Nell Co., Inc., paid the con­signee the
amount of P1,281.19 for the damage to the 13 pails
grouting material which were delivered dented with loosened covers and con­tents
unfit for use.  Upon payment of the
amount of the insurance, the plaintiff thereby became subrogated to the rights
of E. J. NeIl Company to indemnity for the damaged
shipment and the plaintiff then filed with the defendants claim for P854.14
representing the reasonable value of the damaged shipment but defendants
refused to pay said claim.

“The consignee filed on March 19, 1962 the provisional claim
exhibit E with the defendant MPS for the 13 damaged pails grouting material and
the provisional claim exhibit F was filed with defendant Smith, Bell and
Co.  The formal claim exhibit J was filed
by the consignee with defendant Smith, Bell and Co., on May 12, 1962. 
The formal claim exhibit K was filed by consignee Edward J. Nell Company
with the MPS on May 12, 1962.  Attached to the formal claim is exhibit K-1
which is a copy of the invoice setting forth the value of the claim.“

In due course, the lower court rendered a decision dismissing the
complaint “as against defendants Klaveness Line
and/or Smith, Bell & Co.,” upon the ground that “the entire
shipment was discharged from the carrying vessel complete and in good order
into the custody of the MPS” (Manila Port Service), and “ordering the
xx xx xx Manila Port
Service and/or Manila Railroad Company to pay plaintiff the sum of P854.14,
with interest at the legal rate, from the date of the filing of the complaint,
the sum of P200 as attorney’s fees, and costs.” Hence, the present appeal,
which is be­fore this Court, appellants having specifically stated, in their
notice of appeal, the intention to seek therefrom a
“review on pure question of law.”

Appellants assail:  (1) the
jurisdiction of the lower court; and (2) plaintiff’s cause of action against
them.

They question the trial court’s jurisdiction to hear and decide
this case, because the relief sought in the complaint, insofar as appellants
are concerned, is the recovery of P854.14, plus attorney’s fees, in the sum of
P200, and costs, which is within the original exclusive jurisdiction of
municipal courts.  It should be noted,
however, that in addition to appellants herein, who were sued as
custodians or depositaries of the goods consigned to E.J. Nell Co., the
latter’s subrogee, plaintiff herein had, also impleaded, in the alternative, Klaveness
Line and/or Smith, Bell & Co. (Phil.), under the contract of carriage
between them and the shipper, James S. Baker. 
Admittedly, the action under such contract of carriage
calls for the exercise of admiralty jurisdiction, which municipal courts do not
have, and is within the original exclusive competence of courts of first
instance.  And, since Section 5 of
Rule 2 of the Rules of Court permits the joinder of
the two (2) causes of action, in the alternative, it follows that the Court of
First Instance of Manila had jurisdiction over both, even if one of said cause
of action were within the exclusive jurisdiction of a lower court.  Thus, in Rizal
Surety & Insurance Co. vs. Manila Railroad^[1]
this Court expressed itself as follows:

“The sole issue is one purely of law, whether or not the court
below had jurisdiction over the case.

“The complaint in this case named as alterna­tive defendants
under alternative causes of action: (1) C.F. Sharp & Co., Inc., for breach
of contract of carriage by sea; and (2) Manila Port Service and Manila Railroad
Company, for violation of arras­tre contract.  The cause of action against C.F. Sharp &
Co., Inc., being in admiralty, comes within the jurisdiction of the Court of
First Instance (Section 44[d], R.A. 296, as amended, International Harvester
Co. of the Philippines v. Judge Aragon, 84 Phil. 363); whereas, the cause of
action against the Manila Port Service and Manila Railroad Company comes within
the exclusive original jurisdiction of the municipal court inasmuch as the
amount of the demand is less than P5,000.00.  (Section 88, R.A. 296, as
amended by R.A. 2613; Delgado Brothers, Inc. v. Home Insurance Company,
L-16567, March 27, 1961.)

“At the time the complaint was filed, plaintiff did not know
at what precise stage of the series of transactions the loss complained of
occurred.  If the loss took place in transit,
C.F. Sharp & Co., Inc., would be liable therefor;
but if the loss occurred after the goods were landed and discharged from the
carrying vessel; the Manila Port Service would bear the loss.  Hence, the joinder
of causes of action and parties defendants in the alternative which is
permitted by Section 5 of Rule 2 of the Rules of Court, x x
x:

          xx                     xx                     xx                     xx

And, since one of the causes of action is
cognizable by the Court of First Instance the suit should be filed, as was
correctly done by the plaintiff, in said court, notwithstanding that the other
cause of action – if standing alone – would fall within the jurisdiction of the
municipal court, by reason of the amount of the demand (Sapino
v. Manila Oceanic Lines, L-18776, January 30, 1964).  In International Harvester Co. of the
Philippines v. Judge Aragon (84 Phil. 363), where a similar action was filed
with the municipal court, we held that the municipal court lacked jurisdiction
over the case inasmuch as one of the alternative causes of action against the
shipping firm, was an action in admiralty, cognizable by the Court of First
Instance.

“The subsequent dismissal of the cases as against C.F.
Sharp & Co., Inc. did not bring the case within the exclusive original
jurisdiction of the municipal court nor deprive the Court of First Instance of
Manila of the jurisdiction it had already acquired over the case when the
complaint was filed.  It is well settled
that jurisdiction once acquired is not lost but continues until the case is
finally termi­nated.  (Pamintuan v. Tiglao, 53 Phil. 1;
Philippine Land-Air-Sea Labor Union [PLASLU], Inc. v. Court of Industrial
Relations, 93 Phil. 747.)”

Appellants, moreover, impugn plaintiff’s cause of action upon the
ground that the consignee had made use of a permit and a gate pass issued by
the arrastre operator and bearing, stamped thereon, a
statement to the effect that said permit and gate pass are subject to all of
the terms and conditions of the aforementioned Management Contract, one of
which is that

“x x x the
CONTRACTOR shall be relieved and released of any and all responsibility or
liability for loss, damage, misdelivery, and/or
non-delivery of goods, unless suit in the court of proper juris­diction is
brought within a period of one (1) year from the date when the claim for
value of such goods have been rejected or denied by the CONTRACTOR,
provided that such claim shall have been filed with the CON­TRACTOR within
fifteen (15) days from the date of the discharge of the last package from
the carrying vessel.”

and that the
requisite claim has not been filed, either by the consignee or by its subrogee, “within fifteen (15) days from the date of
the discharge of the last package from the carrying vessel,” which took
place on March 16, 1962.

In the present case, a formal claim was filed by plain­tiff
herein more than 15 days after the date last mentioned, or on May 12, 1962.  Although a provisional claim had been made on
March 19, within said period of 15 days, appellants maintain that the
aforementioned provision of the Management Contract refers to formal
claims, not to one provisional in nature. We have already held, however,
that a provisional claim, filed within the requisite period, will satisfy the
requirements of said provision, provided that sufficient facts are set forth in
the claim to afford the arrastre oper­ator a
“reasonable opportunity to check the validity of the claim, while the
facts are still fresh in the minds of the persons who took part in the
transaction and while the pertinent documents are still available.”^[2]
The determination of the issue raised by appellants
herein thus depends upon whe­ther or not the provisional claim filed by the
consignee had given the former the opportunity adverted to above.

In this connection, said provisional claim states that the entire
shipment, of 50 pails of grouting materials and 100 pails of concrete
surface hardening compound, “cannot be found within the pier premises
and/or were found (in) damaged condition” and that provisional claim is
made “for non-delivery and/or any possible damages or losses that may be
found to exist therein.” It further requested that the arrastre
operator “check” its “tally sheets and acquaint” the
claimant of the operator’s “finding at the most earliest possible
time” and that said operator furnish the claimant “Bad Order
Certificate And/or Shorthanded Certificate, or certification of delivery if the
above cargo is not landed or could not be located in the pier premises and/or
after examination of Bad Order cargoes.”

The record before us does not show, however, the date on which
the goods were actually delivered to the consignee.  Hence, we are unable to determine whether the
provisional claim was made before or after such delivery.  If filed prior thereto, the efficacy of said
provisional claim might be debatable, under the doctrine laid down in Shell Co.
of the Philippines vs. Compañia General de Tabacos^[3]
and New Hampshire Fire Insurance Co. vs. Manila Port Service^[4]
in which claims filed before discharge of the goods from the carrying vessel,
and before the consignee had actual knowledge of the loss or damage referred to
in the claims, were declared “premature and speculative.” These two
(2) cases are, however, distinguishable from the one at bar, for the
provisional claims in said former cases were for shortlanding
or land­ing in bad order ex-steamer, and did not cover the damage
or loss that occurred in the possession of the arrastre
operator, after the shipment had been fully discharged, in good order,
from the carrying vessel, whereas the provisional claim in the case before us covers
“non-delivery and/or any possible damages or losses that may be found to
exist.  x x x.”

At any rate, we have held^[5]
that “the period of 15 days within which a claim should be filed with the
Manila Port Service should commence, not from the date of discharge
of the goods from the carrying vessel, but from the date the consignee or
claimant learns of the loss, damage or misdelivery
for which the claim is made,” or from the date on which, with the exer­cise
of reasonable diligence, such information could have been secured.^[6]
Inasmuch as the date when the consignee or claimant came to know or could have
known of the damaged condition of the goods involved in the present case has
been neither alleged nor proved, and the alleged violation of the pertinent
provision of the Management Contract is a matter of defense of appellants
herein, such defense cannot be sustained for lack of one of the elements
essential therefor. 
In other words, it has not been shown that on May 12, 1962, when plaintiff’s formal claim was
filed, over 15 days had elapsed since the consignee or its subrogee
had or could have learned of the damage suffered by the goods aforementioned.

Upon the other hand, it has been established that, upon delivery
of said goods, 13 pails of grouting materials were found to be dented with
loosened covers and the contents dam­aged. 
What is more the arrastre operator issued a
“bad order examination certificate” which contained the notation
“B. O.  Pier,”
indicating that the damage to the cargo had taken place in the pier, and,
hence, after delivery of the goods by the carrier to the arrastre
operator, as attested to by the receipts Exhi­bit 5-Vessel to 14-Vessel,
which are signed by the checkers of both (carrier and arrastre
operator).  If such delivery of
the arrastre operator and the delivery to the
consignee took place before the filing of the provisional claim, on
March 19, 1962, the same, despite its general tenor, gave the arrastre operator a reasonable opportunity to check the
validity of said claim, because the records of said operator – namely, its
aforementioned bad order examina­tion certificate – showed that 13 pails of the
grouting materials specified in the provisional claim, had been damaged in the
pier.  As a consequence, said claim was
substantially adequate to meet the requirements of the Management Contract.

In other words, whether said claim was filed before or after
delivery of the goods to the consignee, appellants’ defense cannot –
considering the circumstances obtaining in this case – be sustained.

WHEREFORE, the decision appealed from is hereby affirmed,
with costs against appellants herein.

Reyes, Dizon, Makalintal,
Bengzon, Zaldivar, Sanchez,
Castro, Angeles, and Fernando, JJ., concur.

^[1]
L-20875, April 30, 1966.

^[2] Consuji vs. Manila
Port Service, L-15551, Nov. 29, 1960.

^[3] L-20230,
July 30, 1965.

^[4] L-20938,
August 9, 1966.

^[5] Yu
Kimteng Construction Corp. vs. Manila
Port Service, L-17027, November 29, 1965.

^[6] Yu Kimteng Construction Corp. vs. Manila
Port Service, supra, Resolution on the motion for reconsidera­tion,
March 3, 1967.